Regulation
Bitwise CIO Matt Hougan Explains Why The Crypto Industry Needs Regulatory Clarity
Bitwise CIO Matt Hougan has recently raised concerns over the lack of regulatory clarity for the cryptocurrency industry, especially in light of the ongoing debate about whether crypto assets should be classified as securities or commodities. In a recent X thread, Hougan explained that the regulatory uncertainty is hurting the industry and preventing it from reaching its full potential.
Bitwise CIO Matt Hougan Stance On Crypto Regulation Clarity
Bitwise CIO Matt Hougan pointed out that the U.S. regulatory framework divides financial assets into two categories: securities and commodities. The Securities and Exchange Commission (SEC) regulates securities, while the Commodity Futures Trading Commission (CFTC) oversees commodities. According to Hougan, this division exists because securities often have insiders—entities that hold crucial information unavailable to the public.
In contrast, commodities like gold or oil do not have insiders in the same way. This is why they are regulated differently, with the CFTC focusing on ensuring fair markets rather than requiring detailed financial disclosures, as the SEC does for securities.
In his X thread, the Bitwise CIO emphasized that decentralized projects, like Bitcoin and Ethereum, cannot have traditional insiders due to their inherent design. These projects are decentralized by nature, meaning there are no central authorities or entities with inside information. Therefore, attempting to classify cryptocurrencies as securities, as is often done in current U.S. regulatory discussions, does not align with the reality of how these networks function.
Echoing Hougan’s sentiment, Ripple CEO Brad Garlinghouse had also criticized current crypto regulatory frameworks, arguing that existing securities laws do not align with the technological advancements crypto represents.
Decentralization and Regulation Challenges
The core idea behind cryptocurrency is decentralization, which is a challenge when it comes to traditional regulatory frameworks. For example, Hougan explained that traditional securities require disclosures like financial statements or ownership structures to prevent insiders from taking advantage of the public.
However, in decentralized networks, there is no single entity to disclose such information, making it difficult to fit them under current securities laws.
As Hougan points out, the problem is not that crypto lacks transparency but that the current regulatory approach doesn’t consider the unique nature of blockchain technology. Instead of trying to fit crypto into outdated frameworks, Hougan advocates for a more tailored regulatory approach that takes into account the decentralized nature of these projects. This would ensure that investors are protected while allowing for innovation to thrive.
The Case for CFTC Regulation
One key point Bitwise CIO Matt Hougan made is that instead of trying to regulate decentralized crypto projects as securities under the SEC, there is a growing argument to have the CFTC oversee them. He explained that the CFTC’s focus on creating fair markets, rather than requiring insider disclosures, makes it a more appropriate regulatory body for decentralized networks like Bitcoin or Ethereum.
Hougan pointed out that some in the industry, including Ripple CEO Brad Garlinghouse, have argued for CFTC regulation. They believe that the SEC’s current stance on crypto as securities is not only ineffective but also counterproductive.
Meanwhile, Garlinghouse took issue with former SEC official John Reed Stark’s claims that cryptocurrencies, including Ripple’s XRP, are securities. Garlinghouse strongly disagreed, calling Stark’s comments “provably false” and asserting that XRP is not a security.
Concurrenctly, he criticized the lack of media fact-checking, pointing out that the segment omitted crucial parts of his interview, including his clarification that XRP is not a security under current laws. Subsequently, the US SEC’s strict approach, according to Matt Hougan, could stifle innovation and harm the industry, especially when good projects are caught in the regulatory crossfire alongside bad actors.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Cryptocurrency investors in Japan are bracing for impact following a plan to reclassify digital assets as financial products. While the plan has elicited excitement from cryptocurrency enthusiasts in the Far East, the ambitious plan will have to scale several legislative hurdles.
Japan Targets Reclassification Of Cryptocurrencies As Financial Products
According to a report by Nikkei, Japan’s Financial Services Agency (FSA) is inching toward classifying cryptocurrencies as financial products. Per the report, the FSA intends to achieve the reclassification via an amendment to the Financial Instruments and Exchange Act.
Currently, digital assets in Japan are considered crypto assets conferred with property rights and seen as payment means. Under the FSA’s plans, cryptocurrencies in Japan will be treated as financial products in the same manner as traditional financial products.
The FSA says it will adopt a slow and steady approach toward the reclassification, carrying out “a private expert study group” to test the waters. If everything goes according to plan, the FSA will submit the amended bill to Parliament in early 2026.
The classification of cryptocurrencies as financial products will have far-reaching consequences for the local ecosystem. Experts say treating cryptocurrencies as financial products will bring Japan closer to a crypto ETF launch amid a changing regulatory landscape.
Furthermore, the move may lower current cryptocurrency taxation for local investors since existing capital market rules will apply to the asset class.
A Fresh Bill For Crypto Insider Trading Is Underway
Apart from the reclassification, the FSA disclosed plans for new legislation against insider trading. The move flows treating cryptocurrencies as financial products and will strengthen existing investor protection rules.
“It is a direction to establish a new insider trading regulation that prohibits trading based on unpublished internal information,” said the FSA. “We will develop laws to prevent unfair transactions.”
However, Japan’s cryptocurrency scene is heating up to a boil, driven by local and international players. Last week, stablecoin issuer Circle secured approval from the FSA for USDC with top exchanges set to list the stablecoin.
Japan’s Metaplanet has tapped Eric Trump to join its Strategic Board of Advisors as it continues to load up Bitcoin.
Aliyu Pokima
Aliyu Pokima is a seasoned cryptocurrency and emerging technologies journalist with a knack for covering needle-moving stories in the space. Aliyu delivers breaking news stories, regulatory updates, and insightful analysis with depth and precision. When he’s not poring over charts or following leads, Aliyu enjoys playing the bass guitar, lifting weights and running marathons.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
In what is being dubbed a major development in the crypto regulation space, the Governor of the US state of Kentucky, Andy Beshear, has signed the ‘Bitcoin Rights’ bill into law. The law promises to safeguard protections for Bitcoin (BTC) users.
Bitcoin Rights Bill Comes Into Effect
Crypto regulations continue to evolve under pro-crypto US President Donald Trump’s administration. In the latest development, Kentucky has become the newest state to enshrine protections for digital asset users.
In an X post published on March 24, crypto advocacy group Satoshi Action Fund announced that Governor Beshear had signed the much-anticipated Bitcoin Rights bill into law. The post stated:
The right to self-custody, run a node, and use of digital assets is now protected for millions of Americans without fear of discrimination.
The bill was first introduced to the Kentucky House by Rep. Adam Bowling on February 19. According to the bill’s description, it seeks to safeguard users’ rights to use digital assets and self-custody wallets. Additionally, it aims to prohibit local zoning changes that discriminate against crypto mining operations.
The legislation outlines guidelines for running a digital asset node and excludes digital asset mining from money transmitter license requirements. It also clarifies that crypto mining or staking is not considered an offer or sale of securities.
On February 28, the bill passed Kentucky’s House of Representatives with a unanimous vote of all 91 representatives in favor. It later passed the Kentucky Senate on March 13, receiving backing from all 37 senators.
Kentucky’s proactive stance toward cryptocurrencies isn’t new. Earlier this year, the state became the 16th US state to introduce legislation seeking to create a Bitcoin strategic reserve.
Meanwhile, neighboring state Arizona is also joining the crypto movement. A recent X post by Bitcoin Laws revealed that Arizona’s House Rules Committee has passed two Bitcoin reserve bills — SB1373 and SB1025. These bills will now head to a full floor vote.
Renewed Optimism Under Trump Administration
Following Trump’s victory in the November presidential election, cryptocurrency regulations in the US are evolving rapidly, with many states introducing legislation aimed at strengthening their digital asset ecosystems and attracting crypto businesses.
Positive changes in crypto regulations are encouraging industry businesses to expand. For instance, leading crypto trading platform Coinbase recently announced plans to hire 1,000 employees in the US.
The Trump administration has also witnessed several lawsuits being dropped against major crypto entities, including Kraken, Coinbase, Gemini, and others. At press time, Bitcoin trades at $87,399, down 0.2% in the past 24 hours.
Featured Image from Unsplash.com, chart from TradingView.com
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Hawk Tuah girl Hailey Welch, known for her association with the controversial $HAWK token, has been cleared of any wrongdoing after a lengthy investigation by the U.S. Securities and Exchange Commission (SEC). The SEC has decided not to press charges against Welch in connection with the rapid rise and subsequent collapse of the meme-based cryptocurrency.
US SEC Investigation Into Hawk Tuah Girl Concludes Without Charges
The SEC had launched an investigation into the $HAWK token after its dramatic price drop. The token, which was linked to Welch’s viral persona, initially saw a market cap surge to $490 million before crashing by over 90%. Investors who were impacted by the crash filed a lawsuit against those behind the project, alleging that the coin had been promoted and sold without proper registration.
Hawk Tuah girl Hailey Welch, who cooperated fully with the investigation, expressed relief after the SEC’s decision. “For the past few months, I’ve been cooperating with all the authorities and attorneys, and finally, that work is complete,” Welch told TMZ.
Her attorney, James Sallah, confirmed that the SEC had closed the case without any findings against her, adding that there would be no monetary sanctions or restrictions on Welch’s future involvement in cryptocurrency or securities.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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